Obama proposes boost for renewables, efficiency at fossil fuels’ expense

Source: Katherine Ling, Hannah Northey and Manuel Quiñones, E&E reporters • Posted: Wednesday, March 5, 2014

resident Obama’s fiscal 2015 budget request would boost funding for innovation in renewable energy, energy efficiency and advanced manufacturing across various programs, reflecting White House priorities — but those policies are likely to spur critics to again question the administration’s commitment to an “all of the above” energy strategy.

The budget proposal would cut funding for the fossil energy program, a move likely to be ignored by Congress once more. The legislative body provided DOE’s Fossil Energy Office with $140 million more than the White House requested in the fiscal 2014 budget.

Overall, the Energy Department would receive a budget of $27.9 billion next year, a 2.6 percent increase from the fiscal 2014 spending bill but a $500 million decrease from what Obama had asked for last year. The proposal includes $4.2 billion in funding for applied energy programs “to drive energy sector innovation” and advances the president’s “all of the above” energy strategy, according to a White House budget summary.

The White House budget request already has been pronounced dead on arrival on Capitol Hill, but it outlines the administration’s priorities as the appropriations process ramps up under the regular budget order for the first time in several years after Congress agreed last fall to a budget plan of $1.014 trillion for fiscal 2015.

Energy Secretary Ernest Moniz last week acknowledged that the top-line number would cause some fiscal pain for the agency, but the normal appropriations process would likely be favorable for energy funding, he said, because there is broad agreement on the importance of energy, science, technology and innovation “across aisles, across chambers, across the administration and Congress, perhaps more than meets the eye.”

Moniz has spent the past month on tour to drum up support and explain the White House’s “all of the above” energy strategy. That strategy is largely reflected in the proposed spending plan, which he said is a commitment to research, development and deployment of “all of those tools in a low-carbon marketplace” (E&E Daily, Feb. 6).

The White House has bundled its top priorities under an “Opportunity, Growth and Security Initiative” that will include an additional $484 million in funding for “innovative” research and development for clean energy technology and manufacturing, and one-time funding for a “race to the top” to incentivize states to modernize the electric grid and drive energy efficiency. The new program also supports and identifies critical infrastructure vulnerabilities, according to the summary. Additionally, the initiative supports infrastructure planning and improvement for the nation’s nuclear security complex.

The budget document also resurrects proposals from last year, including a $2 billion Energy Security Trust that would fund research and development for clean technology from oil and gas revenues, and touts savings and “reforms” found through elimination of $4 billion in fossil fuel subsidies, low-performing programs, and “increasing utilization of existing facilities and infrastructure.”

Rep. Mike Simpson (R-Idaho), chairman of the Energy and Water Development and Related Agencies Appropriations subpanel, said earlier this year that the fiscal 2014 spending bill would serve as a template for fiscal 2015 that, in contrast to Obama’s new budget, would maintain relatively flat spending at EERE and similar accounts while providing a more substantial boost to fossil programs (E&E Daily, Jan. 15).

Wind is up; solar is down

The proposed $2.3 billion for the Office of Energy Efficiency and Renewable Energy represents a 20 percent increase from the fiscal 2014 spending bill but is actually half a billion dollars down from last year’s White House budget request.

Overall, renewable energy programs would receive a 16 percent funding boost, the White House said.

Wind energy, geothermal, vehicle technologies, building technologies, weatherization and advanced manufacturing would all receive a boost in funding under the proposal, with advanced manufacturing receiving $305 million, an almost 50 percent increase from fiscal 2014.

In contrast, solar, hydrogen and fuel cells, and the biofuels programs would see some cuts, despite the fact that the administration has touted the success of its SunShot Initiative, a push to make solar energy competitive in the market without subsidies.

The somewhat controversial weatherization funding would see a large increase under the proposed spending bill, largely restoring the beleaguered funds to pre-sequestration levels at $227 million. The program is often on the front line of discretionary funding cuts by Congress, however, and the final funding levels will likely vary.

The Advanced Research Projects Agency-Energy, which receives bipartisan and bicameral praise, would see a significant increase to $325 million, a 16 percent hike from the fiscal 2014 budget. While ARPA-E receives strong support, its budget is likely to continue to be constrained by overall concerns and negotiations over discretionary spending.

DOE’s programs in charge of the nation’s grid and electricity delivery would also see a boost from fiscal 2014, rising to $180 million, a 28 percent increase to “facilitate the transition from the current electricity delivery infrastructure to a smart grid.”

Fossil energy, coal research

The White House’s fiscal 2015 budget blueprint would provide $476 million for research and development efforts at DOE’s Office of Fossil Energy — a slight decrease from current levels of about $562 million.

The office has been a key force behind carbon capture and sequestration research and has been in the spotlight amid U.S. EPA’s plans to require the technology for all new coal-fired power plants.

The White House budget proposal would scrap the Clean Coal Technology Program, which was created during the 1980s to conduct demonstrations of advanced systems.

“All projects have concluded and only closeout activities remain,” the budget blueprint said. “The budget proposes to cancel unobligated balances.”

It is unclear what effect, if any, the proposal would have, especially because coal-related research dollars are allocated elsewhere in the budget.

“The Department will continue to work with the private sector and academia to conduct and direct research toward overcoming critical challenges to reducing greenhouse gas emissions from fossil energy power generation in the United States,” the budget says.

When it comes to specific line items, the White House would spend $77 million on carbon capture research, compared with current levels at $92 million.

Similarly, the fiscal 2015 blueprint calls for spending $80 million on CO2 storage, down from more than $100 million being spent during the current fiscal year.

Those two line items do not represent the universe of spending on the issue but help shed light on the administration’s priorities.

The total proposed for coal research is $302 million, down from the current level of more than $392 million. Lawmakers generally boost such spending.

Beyond coal, the White House budget includes $25 million for carbon capture and sequestration research related to natural gas. The request conforms with the administration’s stated desire to expand CO2-trapping research to other pollution sources.

This year’s omnibus spending bill scrapped a $25 million prize for the first combined-cycle natural gas power plant able to integrate carbon capture. Lawmakers told DOE that the agency could research natural gas CCS — but not at the expense of similar activities related to coal.

The president is also proposing, much like previous years, to scrap “tax preferences” for the coal industry, including the ability to expense exploration and development costs. The idea has gone nowhere.


The Obama administration’s budget reflects a continued push away from the abandoned Yucca Mountain waste repository and continued support for an alternative plan that the White House released last year based on findings of the president’s high-level Blue Ribbon Commission.

The president’s budget, as in years past, contains no money to advance Yucca Mountain, the Nevada project that has drawn consistent opposition from Senate Majority Leader Harry Reid (D-Nev.).

The budget does, however, include funding for a program — expected to cost $5.7 billion during the first decade — for creating a pilot interim storage facility by 2021, a larger interim facility by 2025 and a final repository more than two decades later.

Currently, about 70,000 metric tons of heavy metal of spent nuclear fuel is being stored at 72 commercial nuclear plants across the country, growing by 2,000 metric tons a year, according to the budget.

The administration explained in the budget that the interim site is critical to limiting — and ultimately ending — liability the government currently faces for not upholding its contractual obligations to take possession of and dispose of waste from U.S. reactors.

But the White House budget is also vulnerable to the mindset in Congress, where senators hoping to push legislation to jump-start stalled nuclear waste policies have run into opposition from House Republicans who insist that the Yucca Mountain waste repository move forward.

Obama in his budget called on Congress to push through legislation to implement his plan for alternatives. “The sooner that legislation enables progress on implementing a nuclear waste management program, the lower the ultimate cost will be to the taxpayers,” he wrote.

The budget, however, included less funds for the Department of Energy’s Office of Nuclear Energy and for the nuclear industry’s goal of licensing the country’s first small modular reactors. The fiscal 2015 budget requests $983 million for the nuclear office, down from more than $1 billion last year.

The fiscal 2015 budget would also provide $97 million for DOE’s $452 million program to finance the licensing of small modular reactors, down from $110 million the previous year.


The Office of Science funding would remain flat with the fiscal 2014 spending, at $5.1 billion, largely continuing support for basic science research.

The programs for basic energy science, biological and environmental research, and advanced scientific computing research — areas that have strong support in Congress — would see a significant bump under the proposed budget, but fusion energy and science laboratories infrastructure funds would be cut slightly.

The budget would continue to fund both international efforts in fusion under ITER, an international project that aims to demonstrate the scientific and technical feasibility of fusion energy, as well as the three domestic fusion research facilities. Some members of Congress have questioned the United States’ commitment to the international projects, concerned that they are harming the domestic push for fusion energy (E&E Daily, Jan. 14).

Click here to read the DOE budget summary.

Click here to read the detailed DOE budget.